The Federal Infrastructure Minister believes redevelopment of Hobart's waterfront rail yards has the potential to do for Hobart what the Opera House did for Sydney.

Anthony Albanese has outlined a $50 million funding package to clean up the 8.4 hectare site.

Transport operations at Macquarie Point will move to a new site at Brighton later this year.

Mr Albanese says it is the most exciting development site in any Australian city.

He likened the industrial area to Sydney's Darling Harbour before it was brought to life.

"I can't think of a project anywhere in Australia in terms of cities as exciting as this one," he said.

"It is the last major destination before Antarctica if you keep heading south, there's a possibility for some associated activity there; an opportunity for leisure but also I'd like to see some affordable housing," he said.

The funding will also be used to establish a group to manage the development.

The community will be consulted about what the remediated site should be used for.

State Infrastructure Minister David O'Byrne says it will provide housing and commercial opportunities.

"This is no longer going to be an industrial site," he said.

Denison Independent Andrew Wilkie is taking the credit for the funding deal.

"I know that I applied what pressure I could bring to bear and I think it helped to unlock this," he said.

"I think everyone was expecting it to be in Infrastructure Australia for many years before it was funded.

"I think the situation in Canberra right now has helped us unlock the funds."

Mr Wilkie sounded a warning to the State Government.

"The opportunity has now been handed to the State Government by the Federal Government. Don't stuff it up."